Fed raises rates to 3-3/4 to 4 percent as inflation stays elevated
The Federal Reserve lifted its benchmark rate by a quarter point on Sept. 16, 2026, while leaving unresolved how long elevated inflation and geopolitical uncertainty will shape future policy.
- The Federal Open Market Committee voted 12-0 on Sept. 16, 2026.
- The federal funds rate target range was raised by 1/4 percentage point to 3-3/4 to 4 percent.
- The Fed said economic activity is expanding at a solid pace and job gains have kept pace with the workforce.
- Inflation remains elevated, and the Fed said the rate increase supports a timelier return to its 2 percent goal.
- The Fed is continuing its policy of maintaining ample reserves in the banking system.
What remains unresolved is how quickly the Federal Reserve’s latest rate increase will pull inflation back to its 2 percent target, and how geopolitical developments may continue to cloud the economic outlook.
The Fed set that question in motion on Sept. 16, when the Federal Open Market Committee voted 12-0 to raise the federal funds rate target range by 1/4 percentage point to 3-3/4 to 4 percent.
The Committee said economic activity is expanding at a solid pace. Domestic spending has been resilient despite elevated uncertainty, productivity growth is strong and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.
Inflation remains elevated. The Fed said today’s policy action will support a timelier return to its 2 percent goal and pledged to deliver price stability. It also said it is continuing its policy of maintaining ample reserves in the banking system.
The statement gave no further guidance on future rate moves.
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